housing market

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http://profitabletradingtips.com/trading-investing/rising-home-sales - Rising Home Sales Home sales are edging up according to the National Association of Realtors. What do rising home sales tell us about the economy and about stock trading opportunities? Apparently more folks in the USA signed more sales agreements in January than in any month since 2010. The stock market took this as good news and stocks went up. If this is the start of a recovery of the housing market traders will want to watch home builders and home improvement companies such as Home Depot and Lowe's. If the housing recovery is real it could mean good things for the economy in general and that would be reflected in stocks across the board. Traders will be wise to engage in technical analysis of the market at this point, however, as some analysts believe that the stock market has moved out ahead of what fundamentals will support. A market correction, like last year could easily wipe out all of January's impressive gains. Rising home sales tell us that people have money and can get credit. It also tells us that people are becoming more optimistic than any time since the 2008 market crash. If the housing market takes off possible good investments could include any of the large US homebuilders such as D.R. Horton, Pulte Homes, Lennar Corp., Centex Corp., KB Homes, Beazer Homes, Hovnanian Enterprises, Ryland Group, M.D.C. Holdings or NVR. Seeing an opportunity for recovery trading, traders may look at Lowe's, Home Depot and Menard's, not to forget Walmart and Target. Although people buy and build homes they need the things of life that go inside as well. Options trading may be an attractive way to approach rising home sales. It is common for the market to get ahead of itself. It is also common for the market to overlook opportunities. An advantage of buying calls or puts on stocks is that one's risk is limited to the price of the options contract no matter how high a stock might rise or how low it might fall. Also, buying options can be an excellent means of leveraging investment capital as one can simply exit an options contract at the most profitable moment without ever buying or selling a stock. Rising home sales got the attention of the market the other day, ever so briefly taking attention away from the European debt melodrama. Anyone expecting to see a spectacular run up of stock prices needs to keep in mind the monumental debt burdens in the US and Europe and the likelihood of austerity measures in Europe causing a recession on the continent over the next year or two. Those who see rising home sales need to look at fundamentals as well as market sentiment and avoid trying to outguess the market. Although stocks may rise and fall based on the news they either stay up or stay down based on solid fundamentals. As usual we are not suggesting any specific stock or stocks but offering a way to approach trading stocks for a profit. Always avoid trading stocks that you do not understand. http://www.youtube.com/watch?v=T_BsLePobF8&feature=plcp